As part of the loan process, tools or other mobile or moveable assets may be pledged as security. A normal business practice of lending institutions is the regular verification of assets supporting loans. Furthermore, certain legislation, including the Sarbanes-Oxley Act and normal audit procedures, require the attestation that the financial statements present fairly the financial condition of the company. The knowledge of the existence and physical location of tools is thus critical to ensure proper reporting and compliance of federal, state and local tax rules and regulations.
Tool “tagging” allows for a low cost efficient tracking of tools used in a variety of industries, including automotive manufacturing processes. Current procedures to identify, locate and track tools at third party supplier locations are inadequate to properly identify all tools, their location and status on a regular and timely basis.